U.S. Department of Transportation

FEDERAL AVIATION ADMINISTRATION

REGULATORY EVALUATION

Air Carrier Contract Maintenance Requirements

NOTICE OF PROPOSED RULEMAKING

(14 CFR PARTS 121, AND 135)

Office of Aviation Policy and Plans

Regulatory Analysis, APO-300

June, 2012
TABLE OF CONTENTS

Section Page No.

Executive Summary................................................................................................. i

I. Assumptions............................................................................................................ 1

II. Benefits................................................................................................................... 2

 

III. Costs........................................................................................................................ 3

A. Air Carrier Costs............................................................................................... 3

 B. FAA Costs......................................................................................................... 5

 

IV. Comparison of Benefits and Costs.......................................................................... 7

 
i

EXECUTIVE SUMMARY

This rulemaking would propose requirements for part 121 and for part 135 (with aircraft 

type certificated for a passenger seating configuration of 10 seats or more) air carriers to

develop policies, procedures, methods, and instructions for accomplishing contract 

maintenance that are acceptable to the FAA and to include them in their maintenance 

manuals. Each operator also would be required to provide to its local FAA Certificate 

Holding District Office a list that includes the name and address of each maintenance 

provider it uses and a description of the type of maintenance that would be performed.

This proposed rule would assist the FAA in its oversight responsibilities and ensure 

consistency between contract and in-house air carrier maintenance. Over 10 years, the 

cost to part 121 and part 135 (with aircraft type certificated for a passenger seating 

configuration of 10 seats or more) air carriers and the FAA would be approximately $2.4 

million ($1.6 million, present value at 7%). The FAA believes these benefits have value 

exceeding the costs.
1

I. Assumptions

 The rule is expected to take effect in 2014. The time horizon for these potential benefits 

is 10 years, 2014 through 2023.

 All monetary values were expressed in constant 2011 dollars. We calculated the present 

value of the potential benefit stream by discounting the monetary values using a 7 percent 

interest rate from 2014 to 2023.

 The FAA identified 301 part 121 and part 135 (with aircraft type certificated for a 

passenger seating configuration of 10 seats or more) air carriers that would be affected by 

this proposed rule.

 We use the following costs per hour as the burdened wage rates for this evaluation.

Unburdened Burdened

Manager $41.34 $69.78

Technical writer $21.78 $36.76

Editor $25.74 $43.45

Auditor $29.50 $49.79

FAA inspector $56.96 $96.14

Source for unburdened rates except for the FAA Inspector rate: http://www.mysalary.com

Source for FAA inspector unburdened rate: http://www.jobview.usajobs.gov 

Source to determine incremental cost impact: Bureau of Labor Statistics 

Table 1. Burdened Labor Rates

Once the wage rates are established, to assess the incremental cost to society, we burden 

the mean wages with fringe benefits and overhead to calculate the actual employer costs 

of employee compensation.
2

II. Benefits

This proposed rule would ensure consistency between contract and in-house air carrier 

maintenance and assist the FAA in its oversight responsibilities. The DOT IG reports placed 

much emphasis on the need for improved FAA oversight of air carrier contract maintenance. In 

order for the FAA to better be able to provide this oversight, the IG, in 2003, recommended the 

agency develop a means to identify repair stations that perform maintenance for air carriers. 

In accord with the IG’s recommendations, we are proposing this rule so the FAA would have a 

dedicated and readily available list in an acceptable format of all air carrier contract maintenance 

providers. These lists would be useful for purposes of FAA analysis and oversight of both the air 

carriers that contract portions of their maintenance and their maintenance providers.

Although the IG reports discussed earlier dealt primarily with maintenance conducted for part 

121 certificate holders, the FAA has found similar problems with maintenance providers not 

following the maintenance programs of certificate holders conducting commuter and on-demand 

operations with aircraft type certificated for a passenger seating configuration, excluding any

pilot seat, of ten seats or more under part 135. In a similar vein, the FAA has also found that 

some of these operators conduct insufficient oversight of their maintenance providers. Even 

before the passage of Public Law 112-95 in February 2012, the FAA was planning to propose 

rules for both part 121 and 135 certificate holders that would require additional procedures and 

oversight to help ensure that the certificate holders’ manuals would be followed by outside 

maintenance providers. The statute mandates new requirements for part 121 certificate holders, 

including that they be directly in charge of what it defines as “covered work.” Because the FAA 
3

has observed the same types of lapses with maintenance performed for part 135 certificate 

holders, we are proposing the same requirements for these operators. The FAA believes that by 

requiring part 135 certificate holders to adopt the new part 121 statutory requirements, a higher 

level of safety would be achieved.

III. Costs

From 2014 to 2023, the cost to part 121 and part 135 (with aircraft type certificated for a 

passenger seating configuration of 10 seats or more) air carriers and the FAA would be 

approximately $2.4 million ($1.6 million, present value), as shown in Table 2. 

Years Air Carriers Costs FAA Costs Total Costs

Present Value 

Costs

2014 $616,569 $28,939 $645,507 $526,926

2015 $192,420 $0 $192,420 $146,797

2016 $192,420 $0 $192,420 $137,193

2017 $192,420 $0 $192,420 $128,218

2018 $192,420 $0 $192,420 $119,830

2019 $192,420 $0 $192,420 $111,990

2020 $192,420 $0 $192,420 $104,664

2021 $192,420 $0 $192,420 $97,817

2022 $192,420 $0 $192,420 $91,417

2023 $192,420 $0 $192,420 $85,437

2014-2023 $2,348,351 $28,939 $2,377,290 $1,550,288

Source: U.S. Department of Transportation, Federal Aviation Administration.

Table 2. Costs of the Proposed Rule

A. Air Carrier Costs

The proposed rule would require that the air carrier’s manual has all the policies, procedures, 

methods, and instructions for the accomplishment of maintenance by another person to include 

the information necessary for certificate holders to ensure all maintenance is performed in 
4

accordance with its maintenance program. The proposed rule would also require that the air 

carrier provides and maintains a list with the name and address of each maintenance provider 

used and the type of maintenance that is to be performed. We estimate that 94 part 121 air 

carriers would have to revise their manuals and provide the list. To revise each manual, we 

estimate a manager would need 4 hours, a technical writer would need 40 hours, and an editor 

would need 2 hours. To provide the list, we estimate a manager would need 1 hour, a technical 

writer would need 3 hours, and an auditor would need 10 hours. To maintain and update the list, 

we estimate a manager would need 6 hours per year and a technical writer would also need 6

hours per year. The manager’s loaded salary expressed as an hourly wage rate is estimated to 

be $69.78 per hour; the technical writer’s hourly rate with benefits is estimated to be $36.76 per 

hour; the editor’s hourly rate with benefits is estimated to be $43.45 per hour; and the auditor’s 

hourly rate with benefits is estimated to be $49.79 per hour. The FAA estimates that for part 121 

air carriers the cost of revising the manuals, providing the list, and maintaining and updating the 

list would be about $837 thousand ($562 thousand present value at 7%) as presented in Table 3.

Affected air 

carriers

Average cost to 

revise manual

Average cost to 

provide list

Average to 

maintain and 

update list

Total Cost

Present Value

Costs

2014 94 $1,837 $678 $639 $296,454 $241,995

2015 $639 $60,091 $45,843

2016 $639 $60,091 $42,844

2017 $639 $60,091 $40,041

2018 $639 $60,091 $37,422

2019 $639 $60,091 $34,974

2020 $639 $60,091 $32,686

2021 $639 $60,091 $30,547

2022 $639 $60,091 $28,549

2023 $639 $60,091 $26,681

2014-2023 $837,277 $561,583

Table 3. Part 121 Air Carrier Costs
5

We estimate that 207 part 135 (with aircraft type certificated for a passenger seating 

configuration of 10 seats or more) air carriers would revise their manuals and provide the list. 

For these smaller operators we expect the manager would complete the manual revisions by

himself or herself and provide the list. To revise each manual, we estimate a manager would 

need 8 hours. To provide the list, we estimate a manager would need 5 hours. To maintain and 

update the list, we estimate a manager would need 6 hours per year and a technical writer would

also need 6 hours per year. The manager’s loaded salary expressed as an hourly wage rate is 

estimated to be $69.78 per hour and the technical writer’s hourly rate with benefits is estimated 

to be $36.76 per hour. The FAA estimates that for part 135 air carriers the cost of revising the 

manuals, providing the list, and maintaining and updating the list would be about $1.5 million

($1.0 million present value at 7%) as detailed in Table 4.

Affected air 

carriers

Average cost to 

revise manual

Average cost to 

provide list

Average to 

maintain and 

update list

Total Cost

Present Value

Costs

2014 207 $558 $349 $639 $320,114 $261,309

2015 $639 $132,329 $100,953

2016 $639 $132,329 $94,349

2017 $639 $132,329 $88,176

2018 $639 $132,329 $82,408

2019 $639 $132,329 $77,017

2020 $639 $132,329 $71,978

2021 $639 $132,329 $67,269

2022 $639 $132,329 $62,869

2023 $639 $132,329 $58,756

2014-2023 $1,511,074 $965,083

Table 4. Part 135 Air Carrier Costs

B. FAA Costs

The FAA has to ensure that the air carrier’s manual has all the policies, procedures, methods, and 

instructions for the accomplishment of maintenance by another person to include the information 

necessary for certificate holders to ensure all maintenance is performed in accordance with its 
6

maintenance program. We estimate that 94 part 121 air carriers would revise their manuals. To 

ensure that each manual was revised, we estimate an FAA inspector would need 1 hour at a 

loaded salary of $96.14 per hour. The FAA estimates that for part 121 air carriers the cost of 

ensuring the manuals were revised would be about $9 thousand ($7 thousand present value at 

7%) as identified in Table 5.

Table 5. Part 121 FAA Costs

# of Part 121 

manuals that 

were revised 

by the air 

carrier

Average cost 

to ensure a 

Part 121 

manual was 

revised

Costs Present 

Value Costs

2014 94 $96 $9,037 $7,377

2015

2016

2017

2018

2019

2020

2021

2022

2023

2014-2023 $9,037 $7,377

We estimate that 207 part 135 (with aircraft type certificated for a passenger seating 

configuration of 10 seats or more) air carriers would revise their manuals. To ensure that each 

manual was revised, we estimate an FAA inspector would need 1 hour at a loaded salary of 

$96.14 per hour. The FAA estimates that for part 135 air carriers the cost of ensuring the 

manuals were revised would be about $20 thousand ($16 thousand present value at 7%), as 

presented in Table 6.
7

# of Part 135 manuals

that were revised by

the air carrier

Average cost to 

ensure a Part 135 

manual was revised

Costs

Present 

Value Costs

2014 207 $96 $19,901 $16,245

2015

2016

2017

2018

2019

2020

2021

2022

2023

2014-2023 $19,901 $16,245

Table 6. Part 135 FAA Costs

IV. Comparison of Benefits and Costs

This proposed rule would ensure consistency between contract and in-house air carrier 

maintenance and assist the FAA in its oversight responsibilities. 

In accord with the IG’s recommendations, we are proposing this rule so the FAA would have a 

dedicated and readily available list in an acceptable format of all air carrier contract maintenance 

providers. These lists would be useful for purposes of FAA analysis and oversight of both the air 

carriers that contract portions of their maintenance and their maintenance providers.

Although the IG reports discussed earlier dealt primarily with maintenance conducted for part 

121 certificate holders, the FAA has found similar problems with maintenance providers not 

following the maintenance programs of certificate holders conducting commuter and on-demand 

operations with aircraft type certificated for a passenger seating configuration, excluding any
8

pilot seat, of ten seats or more under part 135. In a similar vein, the FAA has also found that 

some of these operators conduct insufficient oversight of their maintenance providers. Even 

before the passage of Public Law 112-95 in February 2012, the FAA was planning to propose 

rules for both part 121 and 135 certificate holders that would require additional procedures and 

oversight to help ensure that the certificate holders’ manuals would be followed by outside 

maintenance providers. The statute mandates new requirements for part 121 certificate holders, 

including that they be directly in charge of what it defines as “covered work.” Because the FAA 

has observed the same types of lapses with maintenance performed for part 135 certificate 

holders, we are proposing the same requirements for these operators. The FAA believes that by 

requiring part 135 certificate holders to adopt the new part 121 statutory requirements, a higher 

level of safety would be achieved.

Over 10 years, the cost to part 121 and part 135 (with aircraft type certificated for a passenger 

seating configuration of 10 seats or more) air carriers and the FAA would be approximately $2.4

million ($1.6 million, present value at 7%). The FAA believes these benefits have value 

exceeding the costs.